Theresa May’s “remarkable” intervention to personally reassure Nissan that Britain would secure tariff-free access to European markets helped secure new investment at its Sunderland plant , the Japanese ambassador has said.

Koji Tsuruoka said the Prime Minister’s decision to invite Nissan boss Carlos Ghosn to Downing Street for talks last month was seen as a “strong commitment of goodwill” by the Japanese car manufacturer.

He also said ministers’ commitment to securing tariff free-access to European Union markets was key in Nissan’s decision to invest in the production of two new models in Sunderland.

Prime Minister Theresa May

Appearing before the Lords EU External Affairs Sub-Committee, Mr Tsuruoka said: “I don’t know what are the assurances or what are the conditions that the UK Government might have presented them.

“Again this is a business decision, we are not involved.

“But having had the Prime Minister deal with the president of Nissan is in itself a remarkable engagement by the UK Government.

“And therefore I interpret this as a strong commitment of goodwill on the part of the host Government for Nissan and you might have seen, of course, in the Press that there are certain issues they have discussed and most of them I believe to the satisfaction of both sides.

“So that is what led Nissan to continue maintaining the 7,000 employees they directly employ, and a few thousand more, the many multiple-fold of indirect employment they generate.”

Nissan in Sunderland

During the hearing, Mr Tsuruoka reiterated Japan’s wish for the UK to secure tariff-free trade, particularly for its car manufacturers which rely on EU-wide supply chains.

He also continued to call for transitional arrangements to be put in place once a Brexit deal is reached to stop Japanese companies facing a “shock” change in trading conditions.

And he suggested Japan would be able to more easily strike a post-Brexit free trade deal with the UK if it submits to EU regulations to be set out in the Japan-EU Economic Partnership Agreement (EPA) currently being negotiated.

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“Once you have the Brexit negotiation over and you become a separate economic entity that is capable of negotiating, agreeing with another country on the terms of trade, of course we will be willing to engage,” he said.

“For now, we cannot - not because of Japan not liking it, it’s because the system doesn’t allow us to do that.

“But the value of having a Japan-EU EPA is of course going to be quite useful when we discuss issues with other countries because the UK has been part of the EU, many of the systems I expect will continue to be effective in the UK.

“If we agree with the EU on the regulatory mechanism that we have discussed for example, the harmonisation and how we recognise each other, more likely that could be easily imported into a bilateral trade agreement (with the UK) that we may in the future be considering.”